Education Funding Woes

By Del Stover

Students in Dorchester School District 2 are paying a steep price for a policy decision by South Carolina lawmakers five years ago. In the name of “tax relief,” the state legislature eliminated most residential property taxes for funding schools -- and put the burden for supporting public education on a local tax on business property and state sales and income taxes.

The problem is, the Dorchester schools serve a largely bedroom community outside Charleston, and it has little local industry to tax on behalf of its students. Worse, sales taxes have proven a volatile revenue source, with today’s economic downturn resulting in a painful loss of state funding for public schools.

“We are about $15 million short of what we would have collected” when residential property taxes were part of the state’s school funding system, says Allyson Duke, the district’s chief financial officer. “It’s like a three-legged stool -- once you take one leg away, the stool won’t stand on its own.”

A similar lament is heard among many local school leaders these days. Although a serious budget crisis was inevitable given the severity of today’s troubled economy, at least some of the fiscal pain conceivably could have been eased if funding systems were designed to be less vulnerable to the vacillations of the economy.

Meanwhile, whether through endless tinkering or benign neglect, the funding formulas used to distribute state and federal education dollars -- along with a plethora of new legislative mandates and prescriptive regulations -- hamstring the ability of local officials to respond properly when cuts are needed. So much money comes with strings attached that school officials can find themselves with extra dollars for non-essential services while being forced to lay off teachers and shut down summer school to make ends meet.